As Virginia voters head to the polls, the commonwealth’s Chamber of Commerce CEO says business leaders are looking for candidates who will invest in the nation’s infrastructure and defense industry “without a lot of over-regulation.”
“Virginia business owners are interested in a very stable national business climate. They're interested in one where they understand the rules for business. They are interested in investments in infrastructure for the Commonwealth,” said Barry DuVal, Virginia Chamber of Commerce CEO.
Virginia’s economy is tied to the federal government more than most other states. The region is filled with federal employees, contractors and others whose jobs are connected to the workings of Washington.
“Virginia consistently ranks in the top five in terms of per capita federal spending,” said Bob McNab, an economics professor at Old Dominion University. McNab analyzed the Virginia economy in the 2019 State of the Commonwealth report.
“Virginia has a somewhat symbiotic relationship with the federal government budget. If the federal government budget and especially the defense budget increases, the Virginia economy tends to pick up steam,” said McNab.
The Pentagon is in Northern Virginia and Coastal Virginia is home to one of the largest populations military personnel, according to the Hampton Roads Chamber. When presidential hopefuls talk about defense policy, the Virginia business community listens.
“If you look at the platforms of various Democratic candidates, you see a range of proposals. Some of those include significant reductions in the Department of Defense,” said McNab. “A reduction in DoD spending would not only grab people's attention but would act as a drag upon the economy of the region and the Commonwealth overall.”
DuVal told Yahoo Finance some proposals to reduce federal spending are a threat to the Virginia business climate.
“Virginia's well-positioned to provide and service those men and women in uniform. And we're well-positioned to support the infrastructure, as well as the only place in America to build the United States aircraft carriers that help project power around the world,” said DuVal. “So Virginia is very much aligned in its economic platform to providing the number one responsibility for America's federal government.”
As in other states, Sen. Bernie Sanders (I-VT) will likely face an uphill battle selling his democratic socialist platform to Virginia business leaders.
“Prosperity comes from free enterprise and that prosperity comes from allowing businesses to grow and employ people. And business leaders are not too interested in the results of socialism in the history of the world,” said DuVal, while noting that the chamber does not endorse specific candidates.
Trade policies in mind
DuVal said Virginia business leaders are also closely watching the candidates’ positions on trade.
“Certainly the president has advanced trade and worked with the Congress in a bipartisan way. So again, we want to see either President Trump continue that or the next president continue to work well on international trade,” said DuVal.
Many businesses have blasted Trump’s tariff-heavy trade policies and uncertainty around trade with China rattled markets throughout 2019. Some industries are frustrated that tariffs remain on hundreds of billions of dollars of Chinese goods – but DuVal defends the president’s trade tactics, saying most tariffs were “strategically implemented.”
“I think there are parts of the country that did struggle, especially the agricultural areas of America,” he said. “Virginia's exports and imports continued to grow last year.”
In addition to international trade at the ports, the next commander-in-chief will have to deal with unforeseen challenges that could impact business. DuVal and McNab both warn the coronavirus could pose a threat to Virginia’s ports.
“We're seeing that our port volumes and the projections are down because of the supply chain that's being interrupted internationally,” DuVal said. “As it relates to Virginia companies, we're seeing Virginia companies having a difficult time securing technology devices and other materials and supplies that they rely upon for production.”
“The emergence of the coronavirus and the spread of the coronavirus globally, is a troubling sign in an increasingly globalized world,” said McNab.
DuVal worries the virus could also hurt the state’s tourism industry. “Virginia has history, mountains and beaches – and so tourism is a very important part of our economy and we're beginning to see some impact on our tourism economy and plans for international travel,” he said.
Jessica Smith is a reporter for Yahoo Finance based in Washington, D.C. Follow her on Twitter at @JessicaASmith8.